Here I would like to offer the opinions about the Silk Road from three different sources:
However, such a bold, long-term plan will face challenges, and those challenges will be commercial, economic and political.
First of all, although a focus on expanding trade along the proposed routes into Europe might seem like a “win-win” for all those involved, from the perspective of business, the benefits are not as clear cut. A senior source from the Asian freight industry thinks the direct benefits of better rail links between China and Europe would “probably not be much” because “you’re looking at a difference of 14 days into Europe as opposed to four to six weeks by sea. So it really depends what sort of commodity you’re moving, what value it has and how time sensitive it is.”
This restrained skepticism is reflected in wider market-based views of the New Silk Road. “Although obviously we are interested in specific investments across the region, the ‘New Silk Road’ is the sort of strategic policy initiative that generates little in the way of obvious and direct tangible benefits,” says Jonathan Silver, Banking and Finance Partner at the law firm Norton Rose Fulbright in Hong Kong. “So while business would generally welcome the potential benefits, most would only take a direct interest in the concrete results, as they arise.”
From the outset, the New Silk Road initiative has been less about specific trade routes, than it has been a kind of political symbolism, and a statement of intent to other countries.But the political challenge is that if these three basic routes that comprise the spine of the New Silk Road become so important to China’s national interests, it naturally will be at odds with some major global powers. “Russia will definitely have concerns with China’s expansion through Central Asia,” says Song Gao, Managing Partner at PRC Macro Advisors in Beijing. “For the maritime route, China will have to secure the trading route through the Indian Ocean, that will at least be perceived as a threatening move [by India].”
Indeed, so threatening that India is developing its own strategic vision for the Indian Ocean region—so far called ‘Project Mausam’—as a direct response to China’s New Silk Road.
For centuries the Silk Road, stretching across deserts, steppes, and mountains, linked the imperial dynasties of China with Europe. Chinese rulers used the thoroughfares to expand their power and influence deep into Asia. Today a newly assertive Chinese empire is undertaking a gargantuan project to re-create those ancient trade routes and the political and economic clout that came with them.
Nicknamed One Belt, One Road, China’s plan is to construct roads, railways, ports, and other infrastructure across Asia and beyond to bind its economy more tightly to the rest of the world.
One Belt, One Road is all about China. The program’s designed to forward Beijing’s strategic and economic interests around the world—at the expense of the West’s—and offer lucrative opportunities abroad for Chinese companies enduring a slowdown at home.
Beijing has been using infrastructure projects to bolster its influence among needy nations for some time, most notably in Africa. But One Belt, One Road takes those ambitions to another level.
This powerful concoction of trade and finance could draw more emerging economies closer to Beijing, including in regions where the West would like to gain influence, such as Central Asia. For many developing countries in desperate need of upgraded roads, ports, railways, and power systems, Chinese assistance is almost irresistible. “Anytime the Chinese dangle renminbi in the face of foreign officials, they kind of swoon,” says Scott Kennedy, director of the Project on Chinese Business and Political Economy at the Center for Strategic and International Studies in Washington. “All along the Silk Road they have opened their hearts to the Chinese.”
Beijing’s initiatives may lead to a sort of “development competition” between the U.S. and China, in which Washington feels compelled to increase its own assistance and financing for the emerging world, as has already happened in Africa. Still, the news for the West isn’t all bad. By improving infrastructure, China could help lift growth in poor nations—and the entire global economy. The construction projects will potentially create business for engineering and other companies from the West, too. “We shouldn’t freak out too much about what the Chinese are doing,” Kennedy says. “There’s a huge strategic opportunity for the U.S.”
That’s if the U.S. can take advantage of it. One Belt, One Road is geared ultimately to boost Chinese industry. At home, Beijing is attempting to decrease the economy’s dependence on astronomical levels of credit-driven investment for growth, and that spells tougher times for Chinese construction companies, equipment makers, and other businesses that had gorged on the country’s building boom. A key motivation behind Beijing’s big infrastructure schemes is to find fresh outlets for these companies overseas. China understandably expects that its own companies will take the lead in planning, constructing, and supplying projects it’s also funding.
From American Progress:
Given its leading role in decades of global development, the United States should keep an eye on the Belt and Road initiative’s expansion but avoid instinctively reacting negatively to China’s global economic ambitions. The United States should instead assess specific projects in key regions and make smarter, nuanced assessments regarding China’s rising role in the world and its effect on the international system, as well as what it will mean for U.S. interests around Asia and beyond.
Current Belt and Road initiative projects are linked by their proximity and utility to diversify and insulate China’s trade access. The Chinese-Pakistan Economic Corridor will allow China to circumvent India and the Straits of Malacca, and as a result, it is critical in shortening Chinese trade routes. Israel is an inland corridor that keeps China immune from the effects of Egypt’s political instability on the Suez Canal. Indonesia’s ports and strategic maritime location is a critical pillar in Southeast Asian trade, while Europe is another destination market for Chinese goods and finance. Recently, China and Spain have heralded an agreement for rail transportation from western China’s Xinjiang province to Madrid, Spain. The rail line is expected to cut the transit time between the two destinations by more than half, taking approximately 21 days rather than 45 days through shipping routes. Similarly, new energy development in Pakistan and Central Asia seeks to diversify energy access as China observes the volatility in the Middle East. Furthermore, China has sought to vary its financial markets, seeking linkages with Germany’s Börse stock exchange in order to increase trading in renminbi and accelerate its use as a global currency.
While Chinese firms and government entities are pursuing Belt and Road initiative projects independently of one another, their respective tracks are both parallel and coordinated. CAP’s analysis of press reports notes that the commercial efforts—such as those in the Special Economic Zone for Myanmar—are largely motivated by how investments will help China’s economy. Other contracts, such as handshake agreements between two governments, are worked out between Chinese government entities—embassies and ministries—and partner governments and then handed off to Chinese companies to implement. With its overarching goals, the broad Belt and Road initiative has allowed the Chinese government and Chinese companies to work in relative tandem.
With the international development community prioritizing sustainability, it is in the interest of China, the United States, and partner countries to ensure that the Belt and Road initiative continues to evolve and adapt in the coming months and years. Such adaptation can not only achieve important economic development—it can also ensure China does so sustainably and in a manner that does not undermine that very development.